Striking for what?

Image of strike bannerAccording to recent newspaper reports, civil servants are on the brink of calling a strike that could bring the country to a halt. Whether or not this will come off is yet to be seen, but the reason for the strike call is objection to the coalition’s spending cuts brought about by the previous administration having ‘maxed out’ the country’s credit cards.

Those involved will try to argue that this is all down to the banking crisis and there is some degree of truth in this; had the banking crisis not occurred, most of us might never have realised just how bad the nation’s overspending had become – although many of us had actually been warning about this for years.

It’s not our fault, they will say …
The common complaint from those potentially affected most severely by the spending cuts, is usually that it is “not their fault”. To some extent this is probably fair. However, almost all the problems we currently face can be put down to Gordon Brown and his 13 years of imprudence, first as Chancellor of the Exchequer and latterly as First Lord of the Treasury (Prime Minister).

Had he made any attempt to reduce borrowing, instead of pursuing a popularist agenda of spending almost without control on the very areas that now need to be cut back; had he imposed a form of financial regulation on the banks that actually worked; had he, in fact, had his hand firmly on the tiller, rather than an eye on his neighbour’s house, we might now be in a different place. He might even still be in power!

What is a strike likely to be about?
Apart from potential job cuts – for which we can all have a high degree of sympathy at a personal level – the main objection is the understandable one that trades unionists do not want to see members’ pensions slashed in value. This is understandable, because the main job of unions – once to protect workers from dangerous working conditions and to secure a living wage – has over the years degenerated into negotiating attractive fringe benefits for members, who no longer need the same level of protection as before.

Any dilution of pension benefits is an attack on trade union power. The current proposal (from ex Labour minister Lord Hutton) is that public sector pensions should accrue on the basis of career average earnings, rather than final salary, in future. This is somewhat technical and, for most ‘lower earners’, is unlikely to have a negative impact at all; in fact some may even be better off. Only higher earners – those with the loudest voices and greatest influence – are likely to suffer.

Should they have public support?
The fact remains that, even after the changes should they be implemented – and it will save the nation millions of pounds if they are – public sector workers will still have far better pension rights than most of the rest of the working population. It is inconceivable that ordinary families should support a strike that is against their best interests at every level, just so that a chosen few can enjoy pension rights that the rest of us can only dream about.

But if the Labour Party and trades unions can get the ‘right’ message across through their friends in the BBC and other parts of the media, how many ‘ordinary’ people will actually understand just how they are being railroaded in favour of the interests of a chosen few?

Perhaps it would be best to review your own pension arrangements now, to ensure that you can do as well as the civil servants!

When it comes to looking after our retirement planning and investments, vigilance and professional advice are essential. If you are wondering what to do, contact Robert Bruce Associates for individual assistance.

NOTHING IN THIS ARTICLE SHOULD BE SEEN AS GIVING INDIVIDUAL FINANCIAL ADVICE.